mic Listen to the podcast:

In the midst of one of the worst New Year kick-offs ever for U.S. stock markets, some analysts are finding a silver lining in the dark clouds. Equity investors may be seeing a historical opportunity to pick up bargains, so long as they are prepared to plan out three to five years, according to Wharton finance professor Jeremy Siegel. He added that it would not take much to stabilize things – for example, oil bouncing back to around $40 per barrel and any reports suggesting that China is regaining its footing.

The core of Siegel’s relative optimism today rests on his belief that the U.S. will not see a recession this year, that interest rates will remain low and that, contrary to many analysts’ reports, the Federal Reserve still has many bullets in its holster to stimulate the economy. The Fed could lower key rates, switch to negative deposit rates as Europe has, or reintroduce liquidity injections via quantitative easing (QE), as the European Central Bank suggested it might on Thursday. Siegel made his comments on a special “Market Madness” show on Wharton Business Radio on SiriusXM channel 111. (Listen to the podcast at the top of this page.) Joining Siegel on the show was Jeremy Schwartz, research director at WisdomTree.

Siegel noted that average dividends in the U.S. are at 2.3% while 10-year government securities are yielding just 2%. There have not been many times since World War II that average dividends were above government bond yields in this way, and he does not expect government bond yields to rise any time soon. Siegel added that there was a “corporate earnings recession in 2015,” yet dividends rose 10% and corporations have more than enough cash on hand to continue those strong dividends payouts or even to increase them — “they are paying out only one-third of earnings in dividends” at present, he noted.

“There is a great opportunity for growth in the dividend area,” Siegel noted. Going back to the 1970s, the goal was not always just to get capital gains from stocks, but also to get dividend income. “I think that era may be coming back,” he said.

“It’s a crap shoot” to try to predict where markets are going in the short term, but in the longer term, today’s stock prices represent a buying opportunity, Siegel suggested.